Commentary

Tim Quast
Traders Magazine Online News

We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

Traders Poll

Are you in favor of a pilot program and examination of the rebate system by the SEC?




Free Site Registration

November 8, 2005

NASD Seeks ADF Extension

By Gregory Bresiger

NASD's Alternative Display Facility (ADF), which quietly continues with only some 15,000 trades a day, would be given about another nine months as a pilot project under a recent filing with the Securities and Exchange Commission.

If approved, the ADF would be authorized to operate until April 26, 2006. The NASD isn't asking for permanent authority to operate, which an NASD official said was not unusual.

NASD's Alternative Display Facility (ADF), which quietly continues with only some 15,000 trades a day, would be given about another nine months as a pilot project under a recent filing with the Securities and Exchange Commission.

If approved, the ADF would be authorized to operate until April 26, 2006. The NASD isn't asking for permanent authority to operate, which an NASD official said was not unusual.

"You shouldn't read anything into this fact. This is a pilot. We are simply trying to keep our flexibility as we assess and adjust to the impact of Reg NMS," according to Steven Joachim, executive vice president in the NASD's Division of Markets, Services and Information. The pilot permits members "to quote and trade only Nasdaq listed securities on or through the ADF," according to the NASD filing. "This is because several regulatory issues relating to the trading of exchanged listed securities have not been resolved," the NASD said.

ADF was designed to ensure that ECNs would have an alternate trading channel. The primary ECNs using the ADF are Attain and NexTrade, NASD officials said.

"We're not using the ADF very frequently," a spokesman for NexTrade told Traders Magazine. "We're waiting to see what happens with ADF as Reg NMS goes into effect."